2020 brought some crazy things that happened inside the scope of the housing market. When the first lockdown took place it sparked up a lot of experts to predict a double-digit dip in the real estate market.
Unfortunately, those forecasts didn’t live up to the expectations. There are only less than 1% below pre-pandemic levels are on the top. So, what are the things we should expect in the real estate market that bends a lot of expectations?
But don’t worry our team is bold enough to seek experts’ opinion on what are the factors to look forward in the property market this 2021.
Regional areas will continue to progress.
According to BIS Oxford, Economics chief economist Dr Sarah Hunter If local COVID cases remained controlled and unemployment is in stable rate, other communities and detached houses in smaller capitals should not stop the streak. She said there was still plenty of residual demand from buyers capitalising on buyer’s grants and stamp duty concessions while fighting a sense of FOMO.
“Falling interest rates improved affordability which helped demand, but supply hasn’t responded all that much yet as the volume of transactions – although they are turning – have not risen anywhere near as much,” Dr Hunter told The New Daily earlier this month.
“In terms of long-term sustainability, there’s still demand shock around [reduced] migration, which will likely make apartments cheaper.”
Rental markets will dropdown.
According to Suburbanite director Anna Porter.
She believes the price range for off-the-plan units or high-rise apartments – will precede.
She said it’s largely due to investors is concerned about the health of capital city rental markets and sketchy to purchase a property because the demand from international students remains stagnant.
Which, consequently, would drag down both demand and prices.
The huge loss of renters at the peak of the pandemic, when tenant-heavy industries were hit by job losses and layoffs, drove the vacancy rates in some capitals above 4%.
Negotiable deals on apartments.
Even there are huge numbers of homeowners on deferrals as a safety protocol, suburbs where international students usually reside may become unstable. This is according to Wakelin Property Advisory director Jarrod McCabe
Those include the centre of cities, Inner suburbs near universities and locations where investors converted short-term accommodation merges into long-term rentals.
“If you’re wanting to be an owner-occupier, it spells opportunity because there could be relatively cheap properties, but whether they’re the right types of property is another matter,” Mr McCabe told The New Daily.
Impact of deferrals unlikely to be as strong as predicted.
The deferred loan descends from 493,440 in June to 169,677 in November – a huge 66% reduction. According to the Australian Banking Association.
CoreLogic head of research Eliza Owen told The New Daily is expecting a rise up on house prices in the first half of 2021, ahead of the conclusion of loan payment holidays.
There would be historic rate cuts and programs such as HomeBuilder and the First Home Loan Deposit Scheme.
“Other measures are also outweighing any negatives”
“The only thing worth noting is when you see incentives for first home buyers, for example, it tends to have a vacuum effect where purchases that may have happened anyway are pulled forward…”
“Once these schemes run out, we may see demand slow a little bit, and the other thing that could slow price increases is APRA intervention.”
– Eliza Owen, CoreLogic head of research.